After a swarm of rumors earlier Monday, LG Electronics confirmed its acquisition of the webOS operating system from Hewlett-Packard. Financial terms of the deal were not disclosed.

Palm first developed the webOS operating system with hopes that it would resurrect the ailing mobile brand. HP bought Palm, largely for the company's webOS assets, for $1.2 billion in 2010, and in the next year launched a tablet, the TouchPad, based on webOS, but less than two months later pulled the plug on all webOS projects. HP this week launched its first Android-powered tablet.

Now, it's LG's turn. LG is not planning on using the operating system to power a mobile device, and that could make all the difference. LG plans to deploy webOS into its next-generation Smart TV technology.

"LG is going to try doing the Apple vertical integration path. The issue will be developers and apps," Rob Enderle, principal analyst at the Enderle Group, told us. "However this will give them a patent portfolio on mobile that will rival Apple and the defense against Apple and Microsoft litigation may make this worthwhile even if they continued with Android."

LG's New Path

Although it's unclear how much LG is investing, the company seems to be willing to take the technology and the team that knows how to run it. LG is acquiring the source code, associated documentation, engineering talent and related Web sites associated with webOS.

As part of the transaction, LG also will receive licenses under HP's intellectual property for use with its webOS products, including patents acquired from Palm covering fundamental operating system and user interface technologies now in broad use across the industry.

Skott Ahn, president and chief technology officer of LG Electronics, said the deal
creates a new path for LG to offer an intuitive user experience and Internet services across a range of consumer electronics devices.

"The open and transparent webOS technology offers a compelling user experience that, when combined with our own technology, will pave the way for future innovations using the latest Web technologies," Ahn said.

HP's Cloud Focus

Ultimately, the companies hope the deal is a win-win. Leveraging the well-regarded webOS technology could give LG a competitive differentiation in the Smart TV marketplace. LG has committed to continue innovating around the operating system and incorporate the technology into its roadmap for years to come.

For HP's part, the tech giant finally unloads a high-cost investment and can deploy more resources on computing and other strategic business opportunities. HP will retain ownership of all of Palm's cloud computing assets, including source code, talent, and contracts.

"WebOS and its associated community deliver market-leading platforms for the next generation of connected devices. We are constantly looking for opportunities to accelerate the delivery of this platform from the community," said Bill Veghte, COO at HP. "LG's track record of innovation and broad distribution provides this opportunity, while enabling HP to accelerate our cloud efforts.

"In particular, with the cloud assets that will remain with HP, we will focus on delivering innovative solutions that will enable our customers to mobilize their workforce."